TaxTMI 
TaxTMI 
| A company has a premises (showroom) on rent in which it sells excisable goods manufactured in another | |||||||||
| premises(factory). The goods are cleared from the factory after payment of excise duty. | |||||||||
| The company pays service tax on rent in repect of aforesaid showroom. | |||||||||
| Now the question is whether such company can avail cenvat credit of such service tax paid | |||||||||
| against excise duty payable on goods manufactured. | |||||||||
CENVAT CREDIT
05 Sep 2012 
4 Replies 
2281 Views Asked by
Cenvat credit on renting services depends on nexus to manufacture and clearance up to the place of removal.
Cenvat credit of service tax on renting a showroom is claimable only where the rental service qualifies as an input service used in manufacture or in clearance up to the place of removal; if the showroom is beyond the place of removal and not a depot, no nexus exists and credit is not eligible, while factual characterisation (including whether sales are treated as trading or a depot) determines entitlement. (AI Summary)
Cenvat credit of service tax on renting a showroom is claimable only where the rental service qualifies as an input service used in manufacture or in clearance up to the place of removal; if the showroom is beyond the place of removal and not a depot, no nexus exists and credit is not eligible, while factual characterisation (including whether sales are treated as trading or a depot) determines entitlement. (AI Summary)